Staking on chain guarantees the security of a blockchain. If you provide your tokens, you become a delegator and provide voting power to a validator who will be able to vote in the DAO and make proposals for the improvement of the protocol (any additions, incentives, withdrawal fees in a pool, etc.). By providing "vote power" and the ability to validate transactions, the delegator will receive rewards. The validator earns network fees and passes a portion to the delegator. To become validators usually a lot of tokens and powerful hardware are needed (see Solana). In addition, the machine must always remain online, under penalty of slashing.
If, on the other hand, you simply want to "delegate", ie staking, all you have to do is choose a validator and make the claim whenever you want. Remember that it is APR. There is no autocompound (APY).
THE ONLY RISK: SLASHING
Staking on chain is safer than staking on exchange (because you have to trust the exchange) or the lending platform (I deposit my liquidity and receive an annual interest. Here too I have to trust the platform I am using and it presents itself also the risk of default if the loans are not repaid). The only risk of staking on chain is slashing, punishment when the validator misbehaves.
Usually slashing affects only the validator (not you who are delegating) and this is the case with Eth, Solana, Tron, Tezos, etc but there are some blockchains where the delegate is also punished. The delegator is considered responsible for the violations of the validator (offline machinery, validation of invalid transactions, creation of double chains, etc).
Slashing involves the loss of a part of the tokens present on the validator node based on the infringement committed. For severe cases, the validator can be blacklisted and ejected from the network (jailing).
Another way to suffer slashing are proposals made in governance, where a deposit is required to execute them. You can choose one of the following options when voting for a proposal:
3) No With Veto
If you vote "Abstain", you choose not to vote on the proposal but accept the outcome of the proposal.
"No With Veto" should only be used if you strongly oppose a proposal. This vote will lead to the rejection of the proposal if it reaches the minimum threshold of 33% of the votes cast. Furthermore, the proposer and all those who have filed to initialize the proposal will suffer slashing and lose their deposit.
For example, if 55% of the voters voted "Yes" on a proposal but 35% of the voters voted "No With Veto", the proposal will be rejected. In this case, usually, deposits for the proposal are burned or end up in a community pool. "No With Veto" should only be used when the proposal is considered insane and with effects that could damage the protocol itself.
On some blockchains it is slashed, even if the proposal does not reach the quorum.
In general, speaking of slashing, which blockchains punish not only the validator but also the delegator?
2) The whole Cosmos ecosystem (Osmo, Juno, Kava, Secret Network, Regen, etc)
The release times vary from a few days up to 28 days and are used to verify that the validator has not committed any infringements. The release times guarantee further control and therefore safety of the chain. Usually, slashing is quite rare, as the validator has its own tokens on the node.
HOW TO CHOOSE THE VALIDATOR
There are some tips to follow to choose the validator, let's see them:
1) Don't centralize. Don't pick the first ones on the list, giving those validators too much voting power. There are some blockchains including Polkadot and Cardano that pay rewards up to a certain amount of tokens on the node. If the node is "saturated", whoever arrives later receives no rewards
2) Do not choose the nodes of the exchanges. It is always connected to the above reasons, moreover in many airdrops (see Cosmos) the validators of the exchanges are excluded
3) Do not choose 0 fee validators (the reason always concerns the Cosmos world and in part where there is this incentive of airdrops of new projects to stakers)
4) Check the validator tokens. The more tokens he put in, the greater his attention will be not to end up offline and in general not to suffer slashing
5) Don't choose validators too far from the top ten. It is a form of centralization but choosing validator number 85 or 90 could lead to slashing more easily
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